Post session - Quick review

Indian bourses showed a firm trade on Wednesday as sentiments remained positive with major indices comfortably holding up their gains throughout the session, supported by sustained foreign capital inflows and gain in the global indices. There was jubilation in the local markets after the long awaited banking amendment bill was passed in the Lok Sabha, paving way for the new banking licences. Though, the passage of the bill in the Lok Sabha was facilitated only after the removal of a controversial Forward Market's Contract clause that would have allowed banks to enter into future trading of commodities. The Companies Bill too was passed which envisages new set of rules to improve the quality of governance as it prescribes for stringent rule for auditors and strengthens the hands of the Serious Fraud Investigation Office (SFIO). Under the Companies Bill, corporates that make an average profit of at least Rs 5 crore or have a worth exceeding Rs 500 crore, or their turnover exceeds Rs 1,000 crore in the last three years will have to allocate funds for corporate social responsibility.

Earlier the markets got a modest gap-up start tailing cues from the global markets as the US markets ended strong on hopes of government reaching a deal to avert the “fiscal cliff”. The Asian markets too showed same enthusiasm and most of the indices posted good gains. Finally it was the solid start of the European markets that further boosted the morale of the local markets.

Back home, the global optimism buoyed the markets, extending gains for the second straight day and the major indices reclaimed their crucial levels of 19450 (Sensex) and 5900 (Nifty). The broader markets too, despite losing some strength in final hours managed to post gains of about half a percent. There was hardly any evidence of volatility in the trade today and markets showed steady trade. Strength in the domestic currency due to a stronger euro and Asian markets further aided to the gains in the local markets. There were hopes of economic growth on the domestic front, as the government looked determined about the reform measures after the passing of two important bills of banking and companies’ law. There was spurt in banks and NBFC stocks, as the Banking Bill was seen as a big step in financial sector for greater financial inclusion. All the major aspirants of the banking licences viz., Bajaj Finserv, Mahindra and Mahindra Financials, L&T Finance Holdings, Shriram Transport Finance etc. gained 1-2%. On the sectoral front Auto was the top gainer on the BSE, up by about 2%, while the Health Care, Metal and IT too gained about 1.5%. On the other hand Capital Goods and FMCG sector were showing some profit booking, trading marginally in red. 

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1608:1353 while 144 scrips remained unchanged. (Provisional)

The BSE Sensex gained 93.91 points or 0.48% and settled at 19458.66. The index touched a high and a low of 19516.02 and 19419.76 respectively. 23 stocks were seen advancing while 7 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.46% and Small-cap index was up by 0.45%. (Provisional)

On the BSE Sectoral front, Auto was up by 1.82%, Health Care up by 1.66%, Metal up by 1.39%, IT up by 1.37% and Oil & Gas up 1.23% were the top gainers, while Capital Goods down by 0.68%, FMCG down by 0.47% and Consumer Durables down by 0.26% were the losers in the space.

The top gainers on the Sensex were Sun Pharma up by 3.91%, Tata Motors up 3.41%, ONGC up by 3.08%, Wipro up by 2.87% and Jindal Steel up 2.67%, while, HDFC down by 1.81%, ITC down by 1.55%, L&T down by 1.45%, ICICI Bank down by 0.94% and NTPC down by 0.42% were the top losers in the index. (Provisional)

Meanwhile, Clearing the floor for the Reserve Bank of India (RBI) to start the process to issue new banking licences and widened the window for foreign investments into the banking sector, the Lower House of Parliament cleared the Banking Laws (Amendment) Bill, 2011, after Finance Minister P Chidambaram agreed to drop the controversial clause allowing banks to trade in futures and keeping the sector outside the purview of Competition Commission.

The banking Bill, 2011 was passed by the Lower House after two short adjournments, by the voice vote after amendments proposed by the Left Parties were rejected by the House. Further, the Bill would now be taken up in the Rajya Sabha.

The banking bill will raise the voting rights of investors in private sector banks to 26 percent, from 10 percent, encourage foreign investment and will increase the financial inclusion by opening new banks. The Bill will allow the RBI to replace the boards of private sector banks and increase the cap on voting rights of private investors in public sector banks to 10 percent, from 1 percent.

Moreover, changes to the Bill would pave the way for RBI to issue new bank licences. The central bank had been insisting the enabling legislation be put in place before applications were invited for new bank licences.

India VIX, a gauge for markets short term expectation of volatility lost 0.20% at 14.47 from its previous close of 14.44 on Tuesday. (Provisional)

The S&P CNX Nifty gained 29.20 points or 0.50% to settle at 5,926.00. The index touched high and low of 5,939.40 and 5,910.80 respectively. 40 stocks advanced against 10 declining on the index. (Provisional)

The top gainers on the Nifty were Sun Pharma was up 4.47%, Asian Paints was up 3.36%, ONGC was up 3.22%, Tata Motors was up 3.17% and Jindal Steel was up 2.75%.

On the other hand, HDFC Bank down 2.00%, Axis Bank down by 1.47%, L&T down by 1.45%, ITC down by 1.43% and ICICI Bank down by 0.95% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up 0.53%, Germany’s DAX up 0.30% and the United Kingdom’s FTSE 100 up 0.57%.

Asian markets ended mostly higher on Wednesday amid positive hopes from US fiscal cliff negotiations. Japan's Nikkei ended with strong gains, sending the benchmark over the 10,000-point mark for the first time since April on the back of strong gains for financial and exporter shares and in expectations of more aggressive measures from LDP's Shinzo Abe, who is in charge of the government. However, mainland China shares erased early gains and ended in red.

The South Korean market was closed for the country’s Presidential election.